A Letter to the President

Dear Mr. President,

Here you go again. Class warfare. Although the country is tired of the divisive speeches you seem to be drawn to, let me help you and the country understand the important point that you fail to bring up in relation to this " discussion".

Follow this closely.

In 1983 and again in 1994 under the Boskin Commission, the government, in an attempt to reduce the ever- increasing amount of money it was required to pay out in entitlement programs, made a decision to alter the way it calculated the Consumer Price Index.  By doing this and making it a lower number, the government in effect would and did reduce the amount of money it would pay out, and this would help reduce the debt burden on the country's balance sheet. Every year, the government continues to alter this calculation with minor adjustments. As a result, the CPI no longer accurately reflects the true cost-of-living increase required to maintain a constant standard of living. What this means is that if income increases are tied to this annually adjusted statistic you are falling behind. It isn't just those receiving some type of transfer payments from the government.

Most people whose income raises are tied to the CPI in the private sector are falling behind. Generally speaking, these people are middle-income and lower wage earners. Let me make this point very clear: If you are a salaried employee and your income increases are tied to CPI, each year you are falling behind because that statistic no longer even remotely reflects what your true cost of living increase is annually.

Those whose income is based on performance do not fall victim to this. These people can achieve much higher income increases if they perform well at their pre-determined income structure that usually includes bonuses based on performance and based on commissions and other bonuses. The salaried employee, if their raises are tied to the CPI, is usually accepting a cost of living increase decline of roughly 6-9% a year.

Mr. President, this is a major reason why we have income disparity in this country. This isn't a political position. It is factual. Both parties historically have had a hand in this. It is an unfortunate and an unintended consequence of the government trying to shore up its balance sheet since 1983. Although class warfare might have worked politically for you so far, and gave birth to the failed Occupy Wall Street movement, its birth isn't because of some diabolical scheme originating at the hands of the wealthy. This increasing split in wealth disparity comes as result of a government decision to reduce the amount of money it pays out annually.

Let’s stop attacking the soldiers of the economy for their hard work.